Cede & Co. expects its EBIT to be $106,000 every year forever. The companycan borrow at 7 percent. The companycurrently has no debtand its cost of equity is 14 percent.

a.If the tax rate is 25 percent, what is the value of the company?(Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

b.What will the value be if the company borrows $210,000 and uses the proceeds to repurchase shares?(Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)